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We recommend a sell in the Tata Communications stock from a short-term trading perspective. It is evident from the charts of Tata Communications that it was on an intermediate-term uptrend from February support level of Rs 390 till the May peak of Rs 651.The stock changed its trend after encountering resistance at Rs 651. This reversal was backed by a negative divergence in the daily moving average convergence and divergence indicator. Since mid of May, the stock has been on a short-term down trend. While trending down, it tumbled almost 7 per cent on May 26, conclusively penetrating the 21-day moving average. The stock’s decline continued on May 28when it broke the key support at Rs 510 by diving 5 per cent. It is currently trading well below the 21 and 50-day moving averages. The daily relative strength index has entered into the bearish zone from the neutral region and the weekly RSI is declining in the neutral region. We are bearish on the stock from a short-term horizon. We expect its fall to prolong until it hits our price target of Rs 450 in the approaching trading sessions. Traders with short-term perspective can utilise rallies to sell the stock while maintaining a stop-loss at Rs 524.

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